ECONOMIC INFORMATION
FOR    INDIANA    FARMERS
No. 7 September, 1941
THE LIVESTOCK FEEDING SITUATION
Further increases both in total national production and in prices generally during the
coming year may be taken for granted, but the amount and rate of the advance is problematical. A wartime economy has been entered, with widening employment, higher
wages and better income for farmers. Rapid price advances have already occurred and
further inflationary tendencies can be expected as the result of a large expansion of purchasing power without a corresponding increase in goods and services available for
civilian purchase. The United States index of wholesale prices* for all commodities
advanced from 116 in December, 1940, to 129 in July of this year. The index of Indiana
farm prices* advanced from 97 to 128 during the same period. Prices are expected to
continue to rise on practically everything, more of course, on commodities which are
relatively scarce, but also on commodities which are not so scarce. This is characteristic
of general inflation. While there will be some further attempts by the government to
resist inflationary price rises through additional tightening of credit, higher taxation,
certain types of government borrowing, and also by governmental action in the form
of direct price control, it seems likely that such steps will do little more than delay
the rise.
The capacity of corn belt feed lots in 1941-42 will be determined by the yet uncertain
production of corn. The August 15th estimated production in 14 major corn producing
states was less than 1 per cent above 1940. For the United States as a whole the size of
the crop may be about the same as a year ago. In Indiana the estimated production on
August 15th was 9 per cent above 1940, but 2 per cent below the 10-year average, 1930-39.
The hay crop, both for Indiana and the United States, is estimated to be slightly smaller
than it was in 1940 but much larger than the 10-year average. Due to increasing numbers of grain consuming livestock, the supply of feed per animal unit is expected to be
slightly smaller than in 1940 but larger than the 10-year average. Feed costs will average higher than last year. Consideration should be given to the purchase of needed
supplies soon after harvest for feed prices may increase more than usual as the year
progresses.
BEEF CATTLE—More cattle will go to market this coming year, this being a
natural accompaniment of the expansion phase of the cattle cycle. Under the stimuli of
good prices and favorable feed conditions, cattle numbers in the United States have
increased from the most recent low of 66,083,000 on January 1, 1938, to 71,666,000 on
January 1, 1941.—This4atter-figure represented 96.5Vr of the last cyclical peak of 1934.
Further gains in numbers are expected this year. In Indiana cattle increases have been
moie pronounced, the January 1 total in 1941 being 12% larger than in 1934.
Cattle number gains have been reflected, also, both in cattle slaughter and cattle on
feed figures. Commercial slaughter of cattle during the May to August period have
been the largest on record and represent a gain of 17 percent over the same period in
1940. The August 1 government estimate of cattle on feed in the Corn Belt showed
gains of 17 percent over a year earlier. The increase in Indiana has been somewhat
lower than for the Corn Belt as a whole, with an 8% gain reported for the state.
The movement of feeder cattle out of the large cattle markets has been far below
that of a year ago and is explained chiefly by the delayed movement of such cattle off of
the western ranges where grazing conditions have been exceptionally good this year and
the increased demand for all grades of slaughter cattle.
* 1910-1914 = 100